Optus HFC network gobbled by NBN Co for AU$800m

SingTel Optus will hand over its 400,000 HFC network customers to NBN Co and decommission parts of the network following the Australian Competition and Consumer Commission’s final approval of the AU$800 million HFC asset deal.

The original agreement was announced last June, subject to a raft of conditions including authorisation by the ACCC.

ACCC Chairman Rod Sims that the regulator had concluded that if it did not grant authorisation, competition between the HFC and the NBN would be “unlikely to endure in the long term due to the pervasive and enduring economies of scale associated with the NBN.”

“The ACCC remains of the view that the public benefits, which are clear and quantifiable, on balance outweigh the likely detriment,” he said.

The ACCC’s findings claimed that it would be unlikely that the footprint of the Optus HFC network would be extended beyond the current 1.4 million homes, limiting the potential for its subscriber base to grow beyond its current level of around 400,000 broadband subscribers.

It also holds the view that the Optus HFC network would be uneconomic to operate once a critical mass of customers were lost.

NBN Co CEO Mike Quigley said “the migration of Optus’ cable customers supports the NBN’s business case and confirms the network as the cornerstone of Australia’s digital communications future. This marks a shift from the past where a number of companies used their resources to duplicate network access infrastructure.”

Opposition communications spokesperson Malcolm Turnbull mocked the HFC agreement stating in May, when the draft decision was issued, that it was a grossly anti-competitive move, based on an inconsistent argument. At the time he said “If you accept the ACCC’s reasoning, then the people running the NBNCo are commercial morons."

He's since toned down his language a little, today saying the deal merely represents "A black day indeed for the ACCC and competition in Australia." ®